Mitchell v. Allison

213 P.2d 231, 54 N.M. 56
CourtNew Mexico Supreme Court
DecidedDecember 19, 1949
DocketNo. 5201.
StatusPublished
Cited by51 cases

This text of 213 P.2d 231 (Mitchell v. Allison) is published on Counsel Stack Legal Research, covering New Mexico Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Mitchell v. Allison, 213 P.2d 231, 54 N.M. 56 (N.M. 1949).

Opinions

BRICE, Chief Justice.

This is the second appeal of this case. 51 N.M. 315, 183 P.2d 847. The trial court in the original action dismissed the complaint upon the ground that it stated no cause of action.

The complaint stated in substance, as follows:

The defendant is a real estate broker. During the month of June, 1945, plaintiff was “approached by defendant Allison with reference to buying said property” (the property in suit) from the owner, who resided in California.' The plaintiff advised the defendant that he would buy it for $3 per acre “and after further conference, defendant offered to act for plaintiff and secure a deed for the land, free of encumbrances, for $3 per acre, from the owner.” Plaintiff accepted the offer and authorized the defendant to negotiate with the owner and procure a deed from him to plaintiff. The land was a desirable purchase for plaintiff at said price ($3 an acre) “and even a higher price.” The defendant disregarded his duties to the plaintiff and negotiated a purchase for himself, and placed in the deed the name of one Shearman for the purpose of fraudulently retaining the mineral rights in the land. At that time the defendant knew the mineral rights could be sold for $3 an acre and “in said transaction defendant dealt for himself and double-crossed both the owner and this plaintiff.” The defendant as a broker, attempted to serve both the seller and the buyer without a disclosure of his conduct in the matter, and to procure for himself the mineral rights, and by such self-dealing beat both the seller and his client (the plaintiff) out of the price of such mineral rights. The plaintiff was damaged in the sum of $1600.00. By a bill of particulars asked for by defendant, plaintiff stated that the contract was oral and that plaintiff agreed ,to compensate the defendant for his services as purchasing agent, with payment of the customary commission therefor.

It was held by this court on the first appeal that the allegations above recited stated a cause of action, and this is the law of the case. First Nat’l Bank of El Paso v. Cavin, 28 N.M. 468, 214 P. 325. The case was tried to a jury, which returned a verdict in favor of plaintiff for $960.00, in which amount judgment was entered. From this judgment defendant has appealed.

It is asserted that the plaintiff did not prove facts that would support this judgment. If facts proved establish the above allegations, then the plaintiff is entitled to recover, whether the law of the case, as we have stated it in the first opinion, is right or wrong. In other words, if the plaintiff proved the facts alleged in his complaint, he was entitled to his judgment.

There is substantial evidence that supports the following facts:

In June 1945 (no specific day was stated) plaintiff employed the defendant, who at the time was a real estate broker, to purchase for him the land in question, including all mineral rights; and agreed to pay therefor as much as $3 per acre. It was agreed that plaintiff would pay defendant the usual commission, which was five percent of the purchase price. The defendant said he would see what he could do. At ■that time the defendant was the agent of the owner, Dr. Konigmacher of Fresno, California, for the sale of this property, but this was not disclosed to plaintiff, nor did Dr. Konigmacher know that defendant was also agent for plaintiff to negotiate a purchase for the land.

On the 29th day of May, 1945, the owner of the property (Dr. Konigmacher) sent by mail an abstract of title, and a deed conveying this property to one Dale Shearman, to the First National Bank of Roswell, with instructions to deliver them to defendant upon -the payment of $1164. The documents were in the bank on June 8, 1945, if not sooner. Nothing was said to plaintiff about this -situation at the time he employed the defendant to buy the property for him. Shearman was a partner of -the defendant and -the property was being bought for the two of them jointly. Defendant never advised the owner that Shearman was buying the property for both defendant and Shearman.

On July 7, 1945, the plaintiff made an abortive attempt to buy the property frtm Dr. Konigmacher directly, at $3 per acre. Later in July, Allison paid the First National Bank of Roswell $1164 and received the abstract and deed. Thereupon defendant offered to convey the land to plaintiff, reserving to grantor the mineral rights for $3 per acre, which offer plaintiff rejected, and this suit followed. There is no direct •testimony whether plaintiff would have paid $1164 for the land and abstract. We are satisfied from Dr. Konigmacher’s letters that he would not have sold it for less. Defendant fixed the value of the surface in his offer to plaintiff, at $3 per acre.

It was stipulated by the parties that the deed records of Chaves County show that Dr. Konigmacher deeded the land in question to Dale Shearman; that Dale Shear-man deeded the land, reserving all minerals, to Charles E. Ritter; that Dale Shear-man deeded to plaintiff a one-half interest in the minerals, and that Shearman and Allison leased the mineral rights to the Richfield Company. There was testimony to the effect that the mineral rights were worth at that time from $2.50 to $4 an acre. The land (including minerals) assuming it was a full half section, was bought by Shearman and defendant for $3,325 per acre, plus $100 for an abstract of -title, a -total of $1164.00.

One employed as a real estate broker to purchase property for another is prohibited from purchasing the property for himself, Mitchell v. Allison, 51 N.M. 315, 183 P.2d 847; Bachrach v. Fleming, 269 Pa. 350, 112 A. 445; Quinn v. Phipps, 93 Fla. 805, 113 So. 419, 54 A.L.R. 1173. It is held that a selling broker cannot sell to a partner, Baird v. Conover, 66 Okl. 288, 168 P. 997, without a disclosure of the facts to his principal, and without securing his consent -thereto; and the same rule should apply to one employed to buy property.

After the purchase of this property, it was held by defendant and Shear-man as constructive trustees for plaintiff.

“A person in a fiduciary relation to another who purchases property for himself individually may be chargeable as constructive trustee of the property, even though he purchases it from a third person and not from himself as fiduciary. He is chargeable as a constructive trustee where he purchases for himself individually property which he should purchase for the beneficiary * * 3 Scott on Trusts, Sec. 499.

But it is said that the property could not have been bought for $3 per acre, the maximum price fixed by plaintiff. The defendant was under a duty to have informed plaintiff of this fact, and to inform him the price asked by the owner, and thus have given him an opportunity to purchase at the seller’s price. Quinn v. Phipps, supra. From the value placed on the land by the plaintiff, jury, and witnesses, we are satisfied plaintiff would have bought at the increased price if he had been given that opportunity, to which he was entitled.

The land and mineral rights were sold to others, leaving plaintiff only the remedy of an action at law.

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Bluebook (online)
213 P.2d 231, 54 N.M. 56, Counsel Stack Legal Research, https://law.counselstack.com/opinion/mitchell-v-allison-nm-1949.